PH Manifesto did not specify the time to pay oil royalty

KUALA LUMPUR: Pakatan Harapan (PH) Manifesto did not specify the time for paying 20 percent royalty of oil and gas to Sabah, Sarawak and the states in Peninsular Malaysia, said Minister of Economy Datuk Seri Mohamed Azmin Ali in Dewan Rakyat today.

He said the payment could only be made according to the legal provisions, current terms and conditions, stipulated clauses of Petronas, Petronas agreements with Federal Government and the States Government.

“When structuring the gas and oil royalty in the manifesto, Pakatan Harapan (PH) was considering distributing the wealth of the country in a more justified and fair system. This is also in line with the spirit of giving the states government more responsibilities in its developmental programmes.

“PH has suggested giving 20 percent royalty after tax and not on gross production. However this contradicts the Petroleum Development Act 1974 which states that payment should be made on gross profit.

“If payment is to be made on net profit, the act should be amended and obviously this will take time,” Mohamed Azmin said in his reply to 11 Members of Parliament (MPs) questions on the payment of royalty to the states producing petroleum and gas as promised in the PH Manifesto.

He added, PH government is forming a special cabinet committee comprising of experts to study the Malaysia Agreement 1963 that includes Sabah, Sarawak and Peninsular Malaysia.

This committee he said, will study, correct and make recommendations on the rights of Sabah and Sarawak over their natural resources productivity including petroleum and gas.

Meanwhile the MP of Tuaran, Sabah Datuk Seri Madius Tangau in the additional question session posed a question of why the Prime Minister Tun Dr. Mahathir Mohamad has announced the amount of royalty before discussing and agreed upon by the Sabah Government.

Mohamed Azmin said, the royalty payment should first get the state government’s agreement and for this the state should have engagement with the Federal Government for the extra royalty payment mechanisms.

The Minister also added, as Petronas is a national oil company and not a public listed company, it does not necessarily publicise its annual income and profit. However Petronas publicises its quarterly and yearly financial statements to enable the public to know its financial situation.- Malaysia World News